Wood & Huston adds incentives with Kasasa

Wood & Huston Bank has been offering interest with its free checking accounts since 2006, but now the bank has rolled out a new series of customer perks.

The Cape Girardeau-based institution is one of 10 banks that began offering the Kasasa program May 1 as part of a national pilot program.

Kasasa, a product of Austin, Texas-based BancVue, allows community banks to offer customers one of several incentives when opening checking accounts. Kasasa Cash gives customers 4 percent interest on balances up to $25,000. Through Kasasa Giving, customers earn up to 2 percent interest, along with 5 cents per debit card swipe, to be donated to one of three charities - American Humane Association, Boys & Girls Clubs of America or Stand Up to Cancer. And Kasasa Tunes gives accountholders five free iTunes downloads per month.

Participating banks expect the program to have a net effect on their bottom lines because of the requirements for customers to qualify for the bonuses.

"The things we ask people to do to earn their rewards create savings or income to us as a bank, allowing us to offer these extra benefits," Wood & Huston Springfield Branch Manager Shelley Weborg said.

Customers must use their debit cards at least 12 times a month, sign up for online checking and electronic statements, and have at least one direct deposit or electronic payment per month.

Weborg said the bank earns fee income each time debit cards are used, while online banking and e-statements save on printing and postage. "The income that we make and the money we save help offset paying 4 percent on an interest-bearing checking account," she added.

New face, old idea

Wood & Huston had been offering interest on checking accounts for three years through BancVue, Weborg said, but the Kasasa program adds visibility and excitement for customers.

Visibility is key, according to BancVue Chief Marketing Officer Susan Sierota. She said that surveys indicated customers weren't aware or didn't believe that a community bank could offer perks such as checking account interest. BancVue, however, brings numerous banks together, allowing them to offer the same benefits as their larger counterparts.

"If I took just our current clients today - we have 600 - and added up their branches, we'd be the fourth-largest bank in the country," Sierota said. "We have the scale, but we don't want to lose that community feel. So we wanted to make it a national brand."

That brand is Kasasa, a made-up word (pronounced "kah-sah-sah") intended to grab attention in a commodity market.

The cost for banks to participate is calculated in two parts; banks pay an undisclosed startup fee to BancVue to set up the software and training that go with the programs. They then pay a fee per new account that goes toward marketing Kasasa.

"We partner with them by doing a lot of the marketing plan - we've created TV, radio, print, billboards and in-branch advertisements," Sierota said.

The marketing efforts in Springfield thus far have been limited to brochures and in-bank signage at Wood & Huston's 204 W. Primrose St. location. The bank is one of just two in Missouri initially offering Kasasa, the other being Poplar Bluff-based Southern Missouri Bank. BancVue is not currently accepting new banks, though officials expect to in early 2010. Interested parties can explore the program at www.kasasa.com.

Fighting the big guys

The idea of assisting community banks is nothing new for BancVue, founded in 2005; Sierota called it the company's mission to "help the minifinancial institutions win the war against the megabanks."

Smaller institutions have been losing the battle in recent years; Federal Deposit Insurance Corp. market share data shows that large banks - those with assets of $10 billion or more - hold 70 percent of the market nationally, up from 30 percent 15 years ago. And 80 percent of new accounts opened across the country are opened at the nation's 20 largest banks.

In Springfield, three of the five largest banks by market share - Commerce Bank, BancorpSouth and Bank of America - fall into the large category.

"We've been saying for four years that it's not a good idea to put all the power in a few banks," Sierota said. "Our country is one of the few that has a strong network of community banks and credit unions, and for the most part, community institutions are the ones that support small businesses."

The problem, according to Sierota, is that small banks don't have a long track record of being able to offer innovative products due to budgetary constraints. That lack of ingenuity has not helped the small banks; Wood & Huston, for example, is No. 30 in the Springfield metropolitan statistical area, with just 0.7 percent of the market.

Weborg hopes Kasasa will encourage customers to fight that preconceived notion.

"We can offer a checking account that offers better returns than an account where your money is locked up for a year," she said, noting that most 12-month CDs are paying around 2 percent interest. "Paying 4 percent on a checking account right now is unheard of."[[In-content Ad]]